Weekend on June 9, oil prices dropped more than a dollar per barrel to register a second consecutive weekly decrease as dismal Chinese industrial output statistics fueled concerns about the expansion of demand in the wake of Saudi Arabia's weekend decision to reduce output. Oil prices had climbed earlier in the week as a result of Saudi Arabia's promise to further reduce output on top of the reductions previously agreed upon with OPEC and its allies, often known as OPEC+.
While US West Texas Intermediate crude slid $1.12, or 1.6%, to $70.17 per barrel, Brent crude futures declined $1.17, or 1.5%, to close at $74.79 per barrel. On Thursday, both benchmarks dropped more than $3 following rumours that a US-Iran nuclear deal was close at hand and would increase supplies. After both nations refuted the allegation, prices partially recovered and ended around a dollar per barrel lower.
Back home, crude oil futures with a June 16 expiration date finished 1.34 percent lower at Rs.5,824 per barrel on the Multi Commodity Exchange (MCX), having fluctuated between Rs.5,809 and Rs.5,926 per barrel thus far during the session, as opposed to their previous close of Rs.5,903 per barrel. Overall, the markets have been affected by a surge in US fuel stocks and dismal Chinese export statistics.
Data on China's output: In May, factory gate prices in China declined at a faster rate than expected and at the highest rate in seven years as a result of weakening demand, which also weighed on the manufacturing sector and dimmed prospects for an economic rebound.
Also, some analysts say that oil prices will increase if the US Federal Reserve holds off on raising interest rates at its upcoming meeting on June 13–14. Analysts predict that the Fed's decision may also affect Saudi Arabia's future step.
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